tag:blogger.com,1999:blog-20743459.post114014662058018541..comments2015-08-02T04:28:48.766-04:00Comments on Atlantic Yards/Pacific Park Report: The $6 billion lie: why Ratner's fiscal claim is Swiss cheeseNorman Oderhttp://www.blogger.com/profile/07618087999719667586noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-20743459.post-1144985216984313902006-04-13T23:26:00.000-04:002006-04-13T23:26:00.000-04:00This comment has been removed by a blog administrator.Grand Canyon Tours By Vegas Tourshttp://www.blogger.com/profile/03150905569257840310noreply@blogger.comtag:blogger.com,1999:blog-20743459.post-1143760590199073952006-03-30T18:16:00.000-05:002006-03-30T18:16:00.000-05:00I would like to add a 16th reason why Ratner’s pro...I would like to add a 16th reason why Ratner’s project is a financially foolish venture for the city and state: peak oil and the inevitable enormous changes to our fossil-fueled way of life. Neither this blog, nor what I have read of speakers at the public forums, nor the economic reports (at least, not Zimbalist or Kim & Peebles) have placed the project into a socio-historical-economic context THAT WILL CHANGE OVER THE NEXT 30 YEARS. For reasons I describe below, constricting oil supply will decrease the returns to the public treasury from the BAY project, to make it a huge net loss to the taxpayers.<BR/><BR/>We know the global peak in oil production is coming in the next five years (if it hasn’t happened already - see http://www.princeton.edu/hubbert/the-peak.html). After that, oil supplies (and within 20 years, natural gas supplies) will decline, while global demand continues to climb. What does that mean for dense urban areas like central Brooklyn?<BR/><BR/>Few people anticipate a crisis and in the SHORT TERM (5-10 years), the following cascade of consequences will occur:<BR/>a) energy supply interruptions, reduced worker productivity and to some degree an exodus to the country. <BR/>b) if the interruptions are in the winter, frozen water pipes and abandonment of buildings. Continuing exodus to warmer climates (since people will soon realize they will have to live without heat occasionally). <BR/>c) Business closures (particularly energy-intensive industries), job losses resulting in homelessness, squatting and gang violence against the non-homeless.<BR/>All of these foreseeable consequences will converge to result in a shrinking pool of jobs, and therefore few if any new tenants with high incomes moving to the BAY project AS IT CURRENTLY IS PLANNED.<BR/> <BR/>In general, a decline in fossil-fuel supplies for an urban area will mean, in the LONG term, that public and private entities will try to make the city cope by a variety of means. Some will be misguided (fighting the last war), some will be appropriate. In the long run, we will see:<BR/>a) More density and much greater reliance on mass transit (NYC already does both well). Suburbanites won’t be able to afford to drive into town regularly.<BR/>b) Cities trying to be self-sustaining in food, water and waste management. This will require changes in urban land use, zoning codes, plumbing regulations, etc. The BAY project is a dinosaur waiting to happen.<BR/><BR/>Specifically for the BAY project:<BR/>a) Living patterns will soon change radically – for example, heating and cooling the towers 24-hours a day will not be financially viable, and partway into construction the project will become much more low-rise than currently planned. Result: fewer new residents bringing new jobs (work at home, etc.) with their new revenues to the city/state. Meanwhile, the public is has already committed to $200 million in subsidies …<BR/>b) In 10 years, very few people will be driving to the arena. Locals may replace them, but the ticket prices will have to drop considerably. Result will be lower revenues from the arena, lower salaries to the players, etc. Remember, the CONTEXT is a shrinking economy. <BR/>c) Because the city’s viability will demand that most urban areas be reconfigured (closing streets and putting in permeable pavement to trap water for urban gardens or water treatment areas, for example) Ratner will be poised to make a killing selling land back to the city to sustain the very residents the BAY project brought into the neighborhood. And of course this will increase the public costs and, by reducing the number of tenants, lower tax revenues as well. Two other inevitably necessary reconfigurations, which will be mandated by city or regional law, I’m guessing, in about 10 years – putting solar panels and solar water heaters on existing as well as new construction – and putting green roofs and installing balconies (for container gardening) – will be far more difficult and expensive, and less useful, on BAY project buildings that were not designed for them. One can easily imagine FCR telling the City: I need subsidies to put solar panels on the tower roofs, or I have to raise the rents so high you won’t get ANY tax revenues at all. <BR/><BR/>Once the oil supply starts sputtering, FCR will be in a position to continue to demand subsidies from the city to keep the BAY project viable. Having received the land substantially under market value, FCR will not need to complete the entire project to profit. Not that they will want to abandon the land to the city. But the city will not be in a position to say No to requests for money for improvements not required by city code at the time the BAY project was designed. Another net plus for FCR and net negative for the public.<BR/><BR/>d) I really hate to say it folks, but we’re in for massive inflation. Unless the financial deal includes an inflation-escalator clause, the project will generate tax revenues in inflated dollars. I don’t know the details of the city/state subsidies, but I would guess that FCR gets most of the money up front to start construction while it’s worth something. He pays it back when it isn’t. Sweet deal. <BR/><BR/>The context in which the BAY project will be built will be shifting the ground underneath Zimbalist’s assumptions. For all the factors I’ve mentioned, the BAY project as is will be a huge financial sinkhole for the public. 1976 was more like 2006 than 2036 will be, yet we’re supposed to accept Zimbalist’s amazingly naive assumption that the revenue stream will continue for 30 years unaffected by changes to our economy and environment. A prudent approach would be to stop the FCR deal cold, and delay ANY public deals/construction on the site until policy-makers accept that peak oil means construction and land use regulations will have to change for the city to remain viable.Jacquiehttp://www.blogger.com/profile/10949271962262901969noreply@blogger.com